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• Nations trade to sell goods and services in greater quantity than could be sold
locally.
• Differences in the prices of food and energy commodities reflect a combination of
policy-driven distortions (like subsidies) and genuine comparative advantages.
• Because it is unlikely for human or natural shocks to simultaneously impact the
entire group of global producers of a commodity, global trade markets increase
FEW resilience.
• Grain and Petroleum products are among the most-traded commodities by volume.
• Trade policy tends to balance FEW self-sufficiency objectives against the need to
access less expensive commodities or access commodities during local shocks
like drought or severe winter weather.
• Hard-to-trade Resources (like water) may be traded “virtually” by trading goods
that require a lot of that resource to produce; for instance, a lot of virtual water is
traded via grain.
• FEW trade shocks have been used as a geopolitical weapon during the global era.
• Nations have widely differing trade policies that reflect a blend of openness versus protectionism (e.g., tariffs).
• Neoliberal economics argues that free and open trade enriches all parties and
maximizes resilience, but there are real-world limitations to this philosophy.
• Cartels like the Oil and Petroleum Exporting Countries (OPEC) attempt to
manipulate trade to their members’ advantage.
Discussion Points and Exercises
1. Is trade in food and energy a good thing, or a bad thing? Why or why not, or in
what cases?
2. List, in descending order, the top ten food and energy importing and exporting
nations in the world, in a recent year of record (four lists, 40 total nations).
3. Is your nation is self-sufficient in terms of food, energy, and/or water? Is your
nation a net importer, exporter, or neutral?
4. Has there ever been an event where your nation’s food, energy, or water supply
was unexpectedly interrupted? What happened; what was the impact? How did
your leaders respond?
5. Consider the Oil Shocks of the 1970s and 1980s. What changes did your nation
make to its FEW policies as a result of those shocks?
6. What characteristics, policies, and/or production advantages do the world’s
major FEW exporting nations share?
7. What characteristics, policies, and/or needs to the world’s major FEW importing countries share?
8. Why do you think some countries like the USA pursue a policy of overproducing food and energy commodities, despite the costs of this policy?
9. Are there any countries that specialize specifically in food or energy production
and export? What are the risks involved in being heavily concentrated in this
type of export, or in depending heavily on that exporter?
10. Should trade in food and energy be totally free? Why or why not?
11. Can you think of an example where water is traded directly (not virtually)?
P. Saundry and B. L. Ruddell
• Nations trade to sell goods and services in greater quantity than could be sold
locally.
• Differences in the prices of food and energy commodities reflect a combination of
policy-driven distortions (like subsidies) and genuine comparative advantages.
• Because it is unlikely for human or natural shocks to simultaneously impact the
entire group of global producers of a commodity, global trade markets increase
FEW resilience.
• Grain and Petroleum products are among the most-traded commodities by volume.
• Trade policy tends to balance FEW self-sufficiency objectives against the need to
access less expensive commodities or access commodities during local shocks
like drought or severe winter weather.
• Hard-to-trade Resources (like water) may be traded “virtually” by trading goods
that require a lot of that resource to produce; for instance, a lot of virtual water is
traded via grain.
• FEW trade shocks have been used as a geopolitical weapon during the global era.
• Nations have widely differing trade policies that reflect a blend of openness versus protectionism (e.g., tariffs).
• Neoliberal economics argues that free and open trade enriches all parties and
maximizes resilience, but there are real-world limitations to this philosophy.
• Cartels like the Oil and Petroleum Exporting Countries (OPEC) attempt to
manipulate trade to their members’ advantage.
Discussion Points and Exercises
1. Is trade in food and energy a good thing, or a bad thing? Why or why not, or in
what cases?
2. List, in descending order, the top ten food and energy importing and exporting
nations in the world, in a recent year of record (four lists, 40 total nations).
3. Is your nation is self-sufficient in terms of food, energy, and/or water? Is your
nation a net importer, exporter, or neutral?
4. Has there ever been an event where your nation’s food, energy, or water supply
was unexpectedly interrupted? What happened; what was the impact? How did
your leaders respond?
5. Consider the Oil Shocks of the 1970s and 1980s. What changes did your nation
make to its FEW policies as a result of those shocks?
6. What characteristics, policies, and/or production advantages do the world’s
major FEW exporting nations share?
7. What characteristics, policies, and/or needs to the world’s major FEW importing countries share?
8. Why do you think some countries like the USA pursue a policy of overproducing food and energy commodities, despite the costs of this policy?
9. Are there any countries that specialize specifically in food or energy production
and export? What are the risks involved in being heavily concentrated in this
type of export, or in depending heavily on that exporter?
10. Should trade in food and energy be totally free? Why or why not?
11. Can you think of an example where water is traded directly (not virtually)?
P. Saundry and B. L. Ruddell